Detroit spent $177 million on health benefits for 19,000 retirees last year but figures it can cut that to $28 million-$40 million a year.

Part of the savings would come from paring supplemental coverage for retirees age 65 and older, most of whom already get Medicare.

But the federal government will pick up much of the slack for early retirees through age 64, who will be eligible for subsidized coverage as long as household income is less than 400% of the poverty level.